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NREL study suggests cost gap for Western renewables could narrow by 2025

A new Energy Department study conducted by the National Renewable Energy Laboratory (NREL) indicates that by 2025 wind and solar power electricity generation could become cost-competitive without federal subsidies, if new renewable energy development occurs in the most productive locations. The cost of generation includes any needed transmission and integration costs.

The benchmark for the study is based on the projected future cost of a new combined-cycle natural gas turbine (CCGT) built in the destination market, with natural gas in 2025 at a nominal price of between $7.50/mmBtu and $8.43/mmBtu. According to the analysis, by 2025 geothermal generation could on average be 12% to 35% higher than CCCGT baseline; solar 1-19% higher; and wind at parity up to 13% higher.

Competitiveness indicators for regionally developed renewables in 2025. Source: Hurlbut et al. Click to enlarge.

The study, “Beyond Renewable Portfolio Standards: An Assessment of Regional Supply and Demand Conditions Affecting the Future of Renewable Energy in the West,” divides the timeline of renewable energy development into two periods: the time covered by state renewable portfolio standard (RPS) policies as they exist today, and what may be termed “next generation” renewable energy policies. In the West, the last state RPS culminates in 2025, so the analysis uses 2025 as a transition point.

Renewable energy development, to date, has mostly been in response to state mandates. What this study does is look at where the most cost-effective yet untapped resources are likely to be when the last of these mandates culminates in 2025, and what it might cost to connect them to the best-matched population centers.

—NREL Senior Analyst David Hurlbut

The study draws on an earlier analysis the lab conducted for the Western Governors’ Association to identify areas where renewable resources are the strongest, most consistent, and most concentrated, and where development would avoid protected areas and minimize the overall impact on wildlife habitat.

Among the study’s findings:

  • Wyoming and New Mexico could be areas of robust competition among wind projects aiming to serve California and the Southwest. Both states are likely to have large amounts of untapped, developable, prime-quality wind potential after 2025. Wyoming’s surplus will probably have the advantage of somewhat higher productivity per dollar of capital invested in generation capacity; New Mexico’s will have the advantage of being somewhat closer to the California and Arizona markets.

  • Montana and Wyoming could emerge as attractive areas for wind developers competing to meet demand in the Pacific Northwest. The challenge for Montana wind power appears to be the cost of transmission through the rugged forests that dominate the western part of the state.

  • Wyoming wind power could also be a low-cost option for customers in Utah, which also has its own diverse portfolio of in-state resources.

  • Colorado is a major demand center in the Rockies and will likely have a surplus of prime-quality wind potential in 2025. However, the study suggests that Colorado is likely to be isolated from future renewable energy trading in the West due to transmission costs between the state and its Rocky Mountain neighbors.

  • California, Arizona, and Nevada are likely to have surpluses of prime-quality solar resources. None is likely to have a strong comparative advantage over the others within the three-state market, unless environmental or other siting challenges limit in-state development. Consequently, development of utility-scale solar will probably continue to meet local needs rather than expand exports.

  • New geothermal development could trend toward Idaho by 2025 since much of Nevada’s resources have already been developed. Geothermal power from Idaho could be competitive in California as well as in the Pacific Northwest, but the quantity is relatively small. Reaching California, Oregon, and Washington may depend on access to unused capacity on existing transmission lines, or on being part of a multi-resource portfolio carried across new lines.

The study notes future electricity demand will be affected by several factors including: trends in the supply and price of natural gas; consumer preferences; technological breakthroughs; further improvements in energy efficiency; and future public policies and regulations. While most of these demand factors are difficult to predict, the study’s supply forecasts rely on empirical trends and the most recent assessments of resource quality.


  • David J. Hurlbut, Joyce McLaren, and Rachel Gelman (2013) Beyond Renewable Portfolio Standards: An Assessment of Regional Supply and Demand Conditions Affecting the Future of Renewable Energy in the West (NREL/TP-6A20-57830)



The German decision to favor cleaner renewable energy sources may not be as bad as many 'pro-coal/NG/Nuke' claimed?

Is Germany 10-15 years ahead of many?

Predrag Raos

In 2025 the world will be >80% nuclear as for instance present day France, the only country under the skies with no C-emissions problem. With nuclear <$10/MWh the Green craze will be just another craze in the long history of this crazy world.


The Green craze will be a failed attempt to save humankind from self anihilation caused by the desires of the moneyed interests. No problem though, since humans have shown about the same cognizance as the typical bugs in a petri-dish, they earn also the same end and sympathies. Don't be sad, they were lower life forms.


The start of planning for Olkiluoto 3 was in dec 2000. Current insight is for it to start generating in 2016. 2025 is only 12 years from now. More wet dreams to share with us?

Kit P

NREL can ignore the the unlimited supply of low sulfur Powder River Basin coal at less than $2/MMBTU but power producers will not. Even if we do not use the coal, Asia will import it.

“The start of planning for Olkiluoto 3 was in dec 2000. ”

Around that time, China consumed about the same amount of coal as the US. Now China consumes three time the US. That is like two new coal users the size of the US when Clinton was POTUS. China was unable to produce enough coal to meet its needs in 2007. In 2008, China started planning Olkiluoto 3 types plants (EPR). They will come on line in 2013 &2014.

That is 3400 MWe of capacity that will have a 95% capacity factor and a 60 year design life.

“With nuclear <$10/MWh ”

The last 20 years of a nukes life it is producing power at < $2/MWh for even much smaller plants.

So where will all the the wind and solar plants being built now be in 2025? They will be junk littering the west. They will not be producing power. They do not produce much now.

It is not how long it take to build a power plant, it is how much power it produces for paying customers.

So yes, you can ignore coal, assume NG will get expensive, and pretend renewable energy is free but none of that will make renewable energy work.

Bob Wallace

That's OK ArneAnne. Vogtle will save the day for nuclear.

They began construction on March 12, 2013 for Vogtle 3 with the pour of the basemat concrete for the nuclear island.

Oh, wait. The in June 2013 they announced that the construction schedule had slipped 14 months. And they were about $75 million over budget after only three months.

Never mind....

The next reactor will be built on time and within budget. This time they really, really mean it....

Predrag Raos

Kit P: "The last 20 years of a nukes life it is producing power at < $2/MWh for even much smaller plants."

It's $0.02/kWh or $20/MWh. The rest is OK.

Bob Wallace

Vermont Yankee will close at the end of this fuel cycle. Sometime in late 2014.


Vermont Yankee was shut down by a combination of 3 factors:

  1. An investment bubble in natural gas.
  2. A smaller single-unit plant which cannot spread newly-mandated fixed costs over as much generation.
  3. Exclusion from local power markets by political operators, forcing a base-load plant which should have a fixed-price contract to operate as a merchant instead.

Defective markets and politics are responsible for all of these, not any technical problem with the plant in particular or nuclear energy in general.

Bob Wallace

Vermont Yankee and Kewaunee were fully functioning nuclear reactors which will be/were closed because they could not compete in the current electricity market.

Oyster Point reactor will be closed in a few more years because it would not be able to compete in the current electricity market if it had to bear the cost of needed upgrades.

San Onofre's two reactors and the Crystal River reactor have been permanently closed because the cost of repairing them would have made them unable to compete in the current electricity market.

Giving a reactor a sweetheart fixed-price contract does not mean that it is financially competitive. In fact, it is a clear statement that the reactor is not cost competitive.

Someone might argue that nuclear, being a "baseload" provider should earn a higher rate than other sources of electricity. Clearly if the market had need for that sort of generation prices would be adequate to support nuclear, someone would have written that needed sweetheart contract.

Kit P


Good catch. Thanks for correcting my mistake.

@BS Bob

I am not surprised that BS Bob who lives in California was eager to point out VY closing.

A am actually suprised that VY lasted as long as it did exceeding the deisn life of a small single unit plant.


Bob Wallace

Utilities are going to become irrelevant only if end-users can find a way to store electricity significantly cheaper than the price for utilities to store it. And store electricity in sufficient amounts to let them avoid backup generation.

More likely we're going to see the grid morph to where a good deal of sunshine hour power is provided by end-users. Some of those who used to be only consumers will become both consumers and providers.

End-users can't provide cheap wind (with today's technology). That's going to come from wind farms and their output is likely be cheaper than stored solar.

Our cheapest storage solutions (currently pump-up and longer term flow-batteries or liquid metal batteries) probably won't lend themselves to individual building installation.

Additionally, grids will have access to hydro, geothermal, tidal and other generation that they can sell when the Sun goes down (or doesn't come out).

It would take end-user solar close to 6c/kWh and end-user storage for 2 or 3 cents in order to abandon the grid. I'm not seeing that.

Finally, many people are in no position to set up their own utility system.



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